Hughes & Ors v London Borough of Newham

This is my decision on two preliminary issues which arose in the housing disrepair cases now before me. In each case the Claimant was awarded costs under a consent order made in Bow County Court. Requests for detailed assessment were filed in the SCCO earlier this year, the SCCO being the “appropriate office” for Bow County Court and for other London County Courts. Accordingly, any appeal from my decisions in these cases will lie to the London Designated Civil Judge sitting at the Central London County Court.

The two preliminary issues in these cases are as follows:

There is no real dispute between the parties as to the principles which I must apply including, in particular, the guidance given by the Court of Appeal in Hollins v Russell [2003] 1WLR 2487 and Sarwar v Alam [2002] 1 WLR 125. However, they do disagree as to the effect those principles have on the circumstances of these cases and they also disagree as to the extent which these cases are similar to or different from the circumstances in two other cases decided in the Cost Office, Bowen v Bridgend County Borough Council (March 2004) and Samonini v London General Transport Services Ltd (January 2005).

Each of the Claimants is a secure tenant of the London Borough of Newham. Each of them has brought housing disrepair proceedings against her landlord. In those proceedings they were represented by Messrs Sehgal & Co, a firm of solicitors based in Birmingham. The process by which these Claimants were referred to that firm was as follows:

In July 2003 a letter before claim was sent to the Defendant in respect each case and proceedings were issued in November 2003.

Short particulars of each case appear in the appendix to this judgment. That appendix also records particulars including the repair costs alleged, the amount of compensation ultimately agreed and other details about the disbursement loans taken out by each Claimant.

In each case the CFA made states that the success fee recoverable from the Defendant is 85%. However, in each case, a success fee of only 5% or 10% is sought in the bill of costs.

In each case the Claimant took out a loan of £2000 which sum was credited to the solicitors and held by them in a client account. The interest payable under the loan is 14.8% in respect of which a minimum payment of £444 is stipulated (ie, 18 months interest from the date of the making of the loan). In none of these cases was a loan of £2000 needed. There is unchallenged evidence that, despite the requirement for a minimum payment of £444, none of the Claimants will pay any interest in excess of £444.

In each case the bill of costs includes a claim for £350 plus VAT in respect of the work done by Accident Support Limited.

In Thornton, proceedings were commenced in Birmingham County Court in November 2003. A default judgment was obtained in December 2003 but the Defendant applied to have that set aside and, in March 2004 a consent order was made setting aside the default judgment and transferring the case to Bow Country Court. Allocation questionnaires were filed shortly afterwards and an allocation hearing was listed for 6^th September 2004. However, by the end of April 2004 the necessary repairs had been done and compensation of £3000 plus costs had been agreed. This was formalised in a consent order filed on 15^th June 2004. The bill of costs before me totals £4453.29 made up as follows:

Proceedings in Hughes were commenced in the Birmingham County Court in November 2003. In December 2003 the Defendant filed a defence and began to make arrangements for a telephone hearing at which they would apply for a transfer to Bow County Court. In February 2004, a few days before that hearing, the Claimant consented to an order of transfer. By an order dated 19^th May 2004 the case was allocated to the fast track and listed for trial in November 2004. By August 2004 the Defendant was offering compensation of £1200 but the Claimant was seeking compensation of £8,000. Evidence was prepared and exchanged and, on 29^th October 2004, the Claimant’s solicitor prepared a trial bundle. The Defendant’s schedule of costs for the trial totalled £10.088.75 including VAT. On the day before trial the case settled on terms as to repairs to be completed plus £1200 compensation plus costs. The Claimant’s bill of costs in this case totals £6094.14 made up as follows:

The proceedings in the Opoku-Donker case are similar in many respects to the proceedings in the Hughes’ case. They were issued in the Birmingham County Court in November 2003. A defence was filed and the Defendant applied for a transfer to Bow County Court which, was in fact consented to a few days before the hearing. By order dated 8^th April 2004 the case was allocated to the fact track and listed the trial at the end of September 2004. The matter settled on the day before trial on terms providing for £1300 compensation and costs. The Defendant’s schedule of costs for the trial totalled £7159.38 including VAT. The Claimant’s amended bill of costs in this case totals £7086.01 made up as follows:

The CFA regulation which is in dispute in this case is regulation 4(2)(d). The relevant parts of regulation 4 are as follows:-

“(1)

Before a conditional fee agreement is made the legal representative must… inform the client about the following matters…

(2)

Those matters are…

(d)

Whether other matters of financing those costs are available, and if so, how they apply to the client and the proceedings in question…

(4)

Information required to be given under paragraph (1) about the matters in paragraph (2)(a) to (d) must be given orally (whether or not it is also given in writing)…

I am also asked to consider the Solicitors Practice Rule 15 which provides that solicitors should provide information about costs and other matters in accordance with the Solicitors’ Cost Information and Client Care Code. Paragraph 4(j) of the Code provides as follows:

“The solicitors should discuss with the client how and when any costs are to be met and consider:

(i)

Whether the client may be eligible and should apply for legal aid (including advice and assistance);

(ii)

Whether the client’s liability for their own costs may be covered by insurance;

(iii)

Whether the client’s liability for another party’s cost may be covered by pre-purchased insurance and, if not, whether it would be advisable for the client’s liability for another party’s cost to be covered by after the event insurance (including in every case where a conditional fee or contingency fee arrangement is proposed); and

(iv)

Whether the client’s liability for costs (including the costs of another party) may be paid by another person e.g. an employer or trade union”.

The Defendant alleges and the Claimants accept that, had the Claimants applied for legal aid, all of them would have satisfied the means criteria so entitling them to legal aid without contribution.

The Defendant’s case is that there is insufficient evidence to ascertain whether proper steps were taken by the solicitors or by the Accident Support Limited representative to explain to each Claimant their entitlement to legal services funding. The documentation now produced by the Claimants reveals no active enquiry being made as to the means of the claimants. The only reference to public funding being “considered” is within the client check list in which each Claimant declares that she is not entitled to legal aid. Counsel for the Defendant submits that the CFA regulation, coupled with the Solicitors Practice Rule 15, placed a duty on the Claimant’s solicitors to provide impartial advice on alternative methods of funding which, in these cases, would have been legal aid. Legal aid is still available for housing disrepair claims and, he submits, there are at least 30 franchised firms within a five mile radius of the London Borough of Newham.

Echoing a point made in the Bowen case, Counsel for the Defendant submits that, had the correct advice on legal aid been given, then, on a balance of probability, the Claimants would have instructed local solicitors under legal aid.

Counsel for the Defendant further submits that the failures he relies on amount to material departures from the CFA regulations. They are material because, as the solicitors knew or should have known, the departures have in fact steered these Claimants into a CFA regime which has led to unnecessary expenditure (the cost of the ATE policy, the success fee claimed and the fee payable in respect of Accident Support Limited) and has led to each Claimant having to pay interest on a disbursement loan, which interest is not recoverable as costs. Complaint is also made that, because of the slow progress made by Accident Support Limited and the solicitors, all parties to these cases have been put to litigation costs which would not have been incurred had the cases been conducted more speedily.

On the second preliminary issue Counsel for the Defendant submits that, even if there has been no breach of the CFA regulations, it was unreasonable for these Claimants not to fund their cases by legal aid and, therefore, I should disallow the sums claimed for the ATE policy and the success fee.

The Claimants say there is substantial evidence that the solicitor has fully complied with the regulations. Reliance was placed upon:

The telephone attendance note gives two reasons for not seeking legal aid:

The key passage from the attendance note is as follows:

“That there are various other matters of possible financing of the case including payment of costs on an hourly rate basis to us. The client was asked to consider whether any other possible funding may be available to the client from any other source. With regard to Community Legal Service funding it is unlikely that the client would meet the Cost/Benefit Test (either nor (sic) or later) which would be imposed by the Legal Services Commission, the client does not agree that further delay is merited by again writing to the landlord giving further notice of disrepair. The landlord has already been put on notice and this requirement of the Legal Services Commission will only further delay the client’s claim and give the landlord opportunity to eradicate the claim for compensation by doing all the necessary repairs, thus removing the evidence.”

The Rule 15 notice (which each Claimant signed when she signed the CFA) is more explicit about legal aid. The key passages are as follows:

“3.

OTHER FUNDING OPTIONS

Whilst a conditional fee agreement combined with a Claim Protect legal expenses insurance policy gives you the protection in relation to the costs mentioned above we are obliged to inform you of the alternatives which may be open to you in accordance with our professional rules of conduct.

(a)

PUBLIC FUNDING

You may be eligible for Community Legal Service Funding (“CLS”) which was previously known as Legal Aid. However, we do not carry out work funded by the Legal Services Commission (“the LSC”). If you wanted to pursue your claim with the benefit of CLS funding you would have to instruct another firm of Solicitors.

In order to qualify for CLS you must be financially eligible. Your income and capital must be below certain limits to qualify for CLS. Furthermore the LSC will apply very strict criteria to your applications. The LSC must be satisfied that the cost of funding the claim is proportionate to the benefit that can be expected.

In order to qualify for CLS Funding the LSC must be satisfied that your landlord has been notified of the disrepair. This may mean that you would need to send another letter to your landlord and the give your landlord a reasonable time in which to carry out the necessary work. If the work is carried out your claim for compensation will be more difficult to prove.

Furthermore the fact that the repair work has been carried out will mean that you may not be able to recover the legal costs incurred in recovering compensation. The reason for this is that without the cost of repairs your claim may not exceed £1,000 in total. In those circumstances you would have to pay a Solicitor yourself. There would be no prospect of recovering the legal costs from your landlord.”

The client check list (another document signed by each Claimant when signing the CFA) wrongly purports to confirm that the Claimant in question is both financially eligible and financially ineligible for legal aid. It then repeats the information in the telephone attendance note. The key passages are as follows:

“It has been explained to me and I fully understand that:-

…

(b)

That there are various methods of possibly financing my case including the payment of costs on an hourly basis to my Solicitors, Community Legal Service Funding and any other possible funding which may be available to me from any other source. With regard to Community Legal Service Funding I can confirm that:-

(yes/no) I am not financially eligible for Community Legal Service Funding.

or (delete as applicable)

(yes/no) Although I am financially eligible for Community Legal Service Funding it is unlikely that I would meet the cost/benefit test (either now or alter) which would be imposed by the Legal Services Commission (LSC), nor do I agree that further delay is merited by again writing to my landlord giving further notice of disrepair. I have already put my landlord on notice and in my opinion this requirement of the LSC would only further delay my claim and give my landlord opportunity to eradicate my claim for compensation by doing all the repairs, thus removing the evidence. Even were I still able to pursue a claim for compensation, if the repairs were carried out before my Solicitor could protect my claim by serving a Letter of Claim and Part 36 Offer, I would in all likelihood lose my right to claim the legal costs of bringing this action.”

The form of CFA used in each case is based on the Law Society Model Form and includes at the end the Model Form list of “other points” said to have been orally explained before the agreement was signed. One of these is Community Legal Services Funding. As in the Law Society Model the signatures section of the agreement contains two places of signing for the client, the latter being confirmation that the “other points” were in fact explained orally.

The letter headed “Client Care Letter” which each Claimant received after the CFA was completed contains several passages which are relevant to the issues I must decide. So far as legal aid is concerned it concentrates mainly upon the information contained in the telephone attendance note. It also gives an explanation of the benefit of delaying proceedings and purports to reserve a right by the solicitors not to proceed with the case if, later, they find there is “insufficient disrepair”. The key passages in the letter are as follows:

“We confirm that we have discussed with you the way in which the legal costs of your claim are to be funded. We asked you to check and confirm that you did not already have the benefit of legal expenses insurance, and, before signing any agreement you must be sure that you do not. Further, we also discussed other methods of financing your case, including Community Legal Services Funding, cash funding by you or by anyone else on your behalf. We also explained to you how a conditional fee agreement works and we believe that this is an appropriate way for you to fund your case.

With regards to the Community Legal Services Funding, we can confirm that we do not have a franchise from the Legal Services Commission to offer advice and assistance under this scheme. Further, with regard to the Community Legal Services Funding we believe that it is unlikely that you would meet the cost/benefit test (either now or later) which would be imposed by the Legal Services Commission.

You therefore agreed that further delay would not be merited by writing again to the landlord giving them further notice of disrepair because you have already made complaints. The landlord has already been put on notice and therefore we believe this requirement by the Legal Services Commission may further delay your claim.

The first step is to arrange for your property to be surveyed and we will arrange for this to be done once your case has been placed on cover. This may take several weeks, but will be arranged as soon as possible. We will let you have a copy of the survey when it is received and we will serve a copy upon your landlord, providing you agree to this course of action. The landlord will be invited to inspect your property and prepare a Schedule of Work they propose to carry out. You must keep us advised as to all repairs undertaken.

In order to sustain a claim for compensation you will have to show that the disrepair you have complained of falls within your landlord’s repairing obligations and that the landlord had notice of the need for repairs and either did not carry out those repairs or did not carry them out within a reasonable period of time. The longer the notice the more compensation, the shorter the notice the less compensation and if the council were not on notice for a period of less than say 12 months then the amount of compensation would be so low as to make your case uneconomical.

…

At this stage, we write to confirm that your case has been taken on strictly subject to there being sufficient disrepair in the opinion of either the surveyor who is instructed on your behalf and/or ourselves. In the circumstances, we reserve the right not to proceed with your case if there is insufficient disrepair.

It has already been explained to you but we will again confirm that your case is being funding by way of conditional fee agreement (CFA) and is on a “NO WIN NO FEE BASIS”. You have already signed the CFA and had its contents explained to you so we will not in this letter set out the various terms and conditions contained within the agreement, we enclose a copy of the CFA, a copy of the Law Society Conditions and Rule 15 notice.”

I turn now to summarise each of the four witness statements relied on by the Claimants.

The witness statement of Mandyp Singh Sehgal states that he is a partner at the Claimant’s firm of solicitors and describes the standard procedure of his firm when investigating housing disrepair cases. After explaining the telephone call made by the solicitors which leads to the telephone attendance note he states as follows:

“(v)

I should add, at this point, that during the period 2002 to 2003 this firm had the benefit of a Legal Aid Franchise in both Crime and Immigration & Nationality. The assistant Legal Aid Supervisor was Mr Sajid Malik, a non-practising barrister. He was also Head of Housing. He was, therefore, fully aware of the criteria that needed to be applied in publicly funded matters viz a viz the means of merits tests. He was able to apply this knowledge to Housing Disrepair matters and would use a broad approach in establishing whether a client would satisfy both tests. Thus, if he established that a client would satisfy the means test but would fail on merits he would accept a claim only on the basis that the only funding now available to the client was through a Conditional Fee Agreement. Of course, this would also be subject to there being no other alternative funding available and there being sufficient prospects of success. I am aware that many of the cases that were accepted by him have had only 51% prospects of success and were very borderline in relation to quantum.

(vi)

I am also aware of the problems faced by fellow solicitors, who have applied for public funding but more often than not refusals have been made by the Legal Services Commission on the basis that there were insufficient prospects of success and that it was likely that claims would be allocated to the Small Claims Track. Examples of such refusals are marked and exhibited hereto as “MSS2”.”

The exhibit referred to, MSS2, includes two notices of refusal of legal aid each giving as the reason that the likely benefits appear not to justify the likely costs and also that the claim has been or is likely to be allocated to the small claims track. Although the names of the applicant and the applicant’s solicitors have been blanked out, as have the references, the notices still show the date they were sent which are 03/08/2004 and 28/07/2004 respectively.

In the witness statements made by each Claimant, none of them refers to the cost/benefit test of legal aid nor to the possibility of delay or claim impairment caused by obtaining legal aid. Instead, each Claimant gives a different reason why she preferred not to apply for legal aid.

Valerie Thornton’s witness statement states that:

“I was unsure as to whether I could claim legal aid because my son Alan Thornton lives with me and he was receiving a weekly wage in excess of £100 per week.”

In her witness statement Traci Hughes states:

“I was already in receipt of Legal Aid in respect of another unrelated matter but because of the length of time it took to get Legal Aid in place, I decided to enter into an agreement with Sehgal & Co.”

In her witness statement Caroline Opoku-Donker states as follows:

“I was informed that I may be eligible for legal aid but that Sehgal & Co would be unable to take my claim as they did not have a franchise for housing disrepair. However, I had already been to [a firm named in the witness statement] who have a housing disrepair franchise and I completed several Legal Aid forms. Although I signed the relevant forms I heard nothing from them whatsoever and after several weeks I terminated my instructions with them and decided to instruct Sehgal & Co.”

It is convenient to state my decisions on the two preliminary issues in reverse order.

I am not satisfied that the solicitors or their agents have properly discharged their duties under paragraph 4(j) of the Solicitors Costs Information and Client Care Code. In my judgment the oft repeated advice these Claimants were given that legal aid was not available, or was unlikely to be available, was bad advice. I shall give more particulars of that in a moment. In deciding whether the solicitors or their agents have properly discharged their duties under the Client Care Code I am, I think, required to take into account the quality of the information and advice they gave. Paragraph 1(b) of the Code states:

“The main object of the Code is to make sure that clients are given the information they need to understand what is happening generally and in particular on:

(i)

the cost of legal services both at the outset and as the matter progresses; and

(ii)

responsibility for client’s matters.”

Paragraph 3 of the Code is entitled “Informing the client about costs” and states as follows:

“(a)

Costs information must not be inaccurate or misleading.

(b)

Any costs information required to be given by the Code must be given clearly, in a way and at a level which is appropriate to the particular client. Any terms with which the client may be unfamiliar, for example “disbursement”, should be explained.

(c)

The information required by paragraph 4 and 5 of the Code should be given to a client at the outset of, and at appropriate stages throughout, the matter. All information given orally should be confirmed in writing to the client as soon as possible.”

One of the reasons the Claimants in these cases have been given for not using legal aid was that they would be unlikely to meet the cost benefit test. The cost benefit test for most claims for damages is as follows:

“Full representation will be refused unless the following cost benefit criteria are satisfied:

(i)

if prospects of success are very good (80% or more), likely damages must exceed likely costs;

(ii)

if prospects of success are good (60% - 80%), likely damages must exceed likely costs by a ratio of 2:1;

(iii)

if prospects of success are moderate (50% - 60%), likely damages must exceed likely costs by a ratio of 4:1. (General Funding Code para 5.7.3)”

However, although those cost benefit ratios may be taken into account as guidelines in these cases (see para 3C-163 of the Legal Services Commission Manual, quoted below) housing disrepair cases are subject to a cost benefit criterion which is expressed in very general terms. I shall set out below a lengthy quotation from paras 3A – 054 of the Legal Services Commission Manual which also touches upon the second reason given for not seeking legal aid in these cases.

“Section 10 Housing

10.1

Scope

This section applies to applications for legal representation for a client in proceedings which concern possession of a client’s home, the client’s legal status in the home or the obligations of a landlord or other person to keep the client’s home in good repair and allow quiet enjoyment of the property. However, this section does not apply to cases within the scope of Section 7 (judicial review).

…

10.4

Criteria for full representation – other housing cases

10.4.1

General Funding Code

The following criteria replace the criteria in Section 5.7 of the General Funding Code in applications within the scope of this section other than possession cases.

10.4.2

Notification to landlord

Where the client is applying for Full Representation to bring proceedings the application may be refused unless the landlord or other person responsible for dealing with the matters complained of has been notified of the client’s complaint and given a reasonable opportunity to respond and put matters right, save where this is in impracticable in the circumstances.

10.4.3

Prospects of success

Full representation will be refused if:

(i)

prospects of success are unclear;

(ii)

prospects of success are borderline and the case does not appear to have a significant wider public interest or to be of overwhelming importance to the client;

(iii)

prospects of success are poor.

10.4.4

Cost benefit

Full representation may be refused unless the likely benefits of the proceedings to the client justify the likely costs, having regard to the prospects of success and all other circumstances.”

I do not accept that, at the time these cases were taken on, the Claimants prospects of success appeared unclear, borderline or poor. In valuing the likely benefits of the proceedings I think it is right to take into account the cost of repair as well as the damages claimed. In all cases the repair costs claimed and the damages claimed substantially exceeded the claimants’ likely costs at legal aid rates (including trial costs).

The second reason given for not seeking legal aid in these cases refers to the possible delay caused by the LSC requirement that notice would have to be given to the landlord. In each of these cases notice had already been given to the landlord. I do not understand the text I have quoted from the Legal Services Commission Manual as meaning that a further notice would have to be given before legal aid could be applied for. Further guidance on this topic is given at para 3C-163 of the Manual:

“7.

The criteria for housing disrepair claims are unlikely to be satisfied unless the following information is supplied with the application for legal representation:

(a)

an adequate statement of the case setting out the allegations of disrepair in detail;

(b)

the date(s) when the landlord was put on notice and the method by which this was done;

(c)

an indication of whether there had been any previous proceedings …

(d)

details of the availability of local arbitration or mediation arrangements and Ombudsman schemes or why it is inappropriate to pursue;

(e)

whether there had been previous proceedings, to justify an explanation why further action is justified;

(f)

an estimate of the value of the claim, with reference to the severity of the disrepair, the small claims limit and the relevant case law;

(g)

copies of any relevant correspondence with the landlord or agents; and

(h)

details of the opponent’s financial circumstances and ability to pay (in all cases where compensation or costs will be claimed) …

(i)

confirmation of whether the disrepair pre-action protocol applies or the justification for departing from the protocol in the particular case.

8.

Legal representation will not be granted if the main purpose of the proceedings is to obtain damages where the relevant cost benefit criterion is not met. As explained in Section 4.9 of this Guidance whilst the cost benefit ratios in the General Funding Code do not apply directly to cases concerning disrepair to the client’s own home they may be taken into account as guidelines as to whether a case is cost effective.”

Even if, in order to obtain legal aid, it would be necessary to give notice again to the landlord, I do not think it was right for the solicitors to anticipate that this would be a cause of any substantial delay in proceedings. (Indeed, although this is not part of my decision, we can see with hindsight that in these cases resort to legal aid might well have led to a speedier result than was in fact obtained.)

In my judgment the Claimants’ solicitors and their agents have failed to give the Claimants proper advice as to the availability of legal aid. Accordingly, it is unreasonable for these Claimants to seek to recover from the Defendant the additional liabilities (success fee and insurance premium) which their chosen method of funding has resulted in.

The position in these cases is much the same as the position in Bowen v Bridgend Borough Council (see in particular paras 87 to 89). The benefits to these Claimants from not using legal aid (see in particular the eleven listed benefits set out in paragraph 19 of the Claimants’ counsel’s skeleton argument) are too dearly bought bearing in mind the costs of the success fee and insurance premium they give rise to.

Nor do I think the individual reasons given by each Claimant show that it would have been reasonable for them to instruct a solicitor on CFA terms with insurance even if they had received better advice on legal aid. Ms Thornton should have been told that her entitlement to legal aid would not have been affected by her son’s earnings. Ms Hughes’ professed decision to abandon legal aid because of an unspecified amount of delay in an unrelated matter was not reasonable. In her witness statement, Ms Opoku-Donker gives a stronger reason for not using legal aid; her unhappy experience relates to a specified firm and relates to a housing disrepair claim. However, her evidence does not persuade me that her decision not to attempt legal aid again was reasonable. I have reached the conclusion that, had these ladies been advised to seek legal aid in this matter, they would have done so.

I recognise that none of the reasons given by the Claimants were tested by the Defendants in cross examination and, therefore, they can be taken to accept the reasons given as honest. Nevertheless those reasons are not, in my view, persuasive. They appear to be ex-post facto rationalisations of each claimant’s decision to instruct Sehgal & Co.

I am in no doubt that, by failing to properly inform these Claimants of the availability of legal aid, the Claimant’s solicitors have departed from what was required of them by Regulation 4(2)(d) and that departure has had a materially adverse effect upon the protections afforded to their clients. It is clear from the decision of the Court of Appeal in Hollins v Russell [2003] 1 WLR 2487 that the CFA Regulations were intended to duplicate the Client Care Code (see in particular paras 28, 29 and 30). Accordingly, if a CFA is to be valid, the solicitor must ensure as far as possible that the client understands what she is letting herself in for and is able to make an informed choice amongst the funding options available to her. Compliance with the Regulation is not achieved merely by mentioning the possibility of legal aid to someone likely to qualify for it, along with words likely to discourage her from pursuing it. The burden on the solicitor is the familiar, heavy, one which is to put the client’s best interests first. In Hollins, the Court of Appeal summarised Regulations 4(2)(a) to 4(2)(d) as follows:

“[199] These duties oblige the … solicitor to ensure that his client receives proper oral explanation of the following matters: (a) the circumstances in which he may be liable to pay the … solicitor’s costs in accordance with the CFA; (b) the circumstances in which he may seek assessment of the fees and expenses of the … solicitor, and the procedure for doing so; (c) whether he considers that the client’s risk of incurring liability for costs in respect of the proceedings to which the CFA relates is insured against under an existing contract of insurance; (d) whether other methods of financing those costs are available, and if so, how they apply to the client and the proceedings in question. The client must also receive an explanation of the effect of the CFA both orally and in writing.”

I accept that if these Claimants had been given an adequate explanation about legal aid orally that could amount to full compliance with the Regulations even if incorrect advice was given in writing. However, in the absence of evidence as to what was said orally, I think it right to assume that the attendance note made by the solicitor (see para 22 above) and the client check list signed by each Claimant in the presence of the Accident Support Ltd representative (see para 24 above) do accurately represent the information which was given orally on those occasions.

I consider that the effect this departure from the Regulations has had upon each Claimant is materially adverse to their protection because, it has led to them adopting a funding system under which they have incurred substantial irrecoverable costs, namely, the cost of insurance, the interest on the loan taken out and, but for the Regulations, the contractual obligation to pay success fees as well as base fees.

The consequence of my decision that the CFAs are unenforceable is that the Defendant’s maximum liability for costs in these cases is in respect of paid disbursements and any costs of assessment allowed. In reaching this decision I have not found it necessary to make any comparison between these cases and the earlier Costs Office cases, Bowen v Bridgend County Council and Samonini v London General Transport Service Ltd. In any event, it is a statement of the obvious that decisions in costs cases are notoriously fact sensitive.

I am not expecting any party to attend at the formal delivery of this judgment although they may do so if they wish. I have appointed Friday 21 October 2005 at 10.00 a.m. for the next hearing. However, if either party so requests, I will list this matter for a short hearing at 10.00 a.m. on August 1, 2, 3 or 4^th 2005. At that hearing I will hear argument as to any permission to appeal sought and as to any directions sought concerning the conclusion of these detailed assessments.

Appendix to Judgment of Master O’Hare